Do we need new housing tax breaks? No!

The Wall Street Journalreports (subscription required) that "Efforts to create new tax breaks to encourage home purchases are gaining attention on Capitol Hill, as lawmakers gird for a major debate this spring on how best to shore up the nation's troubled mortgage markets."

I'm skeptical of any tax break designed to artificially boost demand for homes Weren't gimmicks what got us into this mess in the first place? Referring to a tax break proposal being advanced by National Association of Realtors economist Lawrence Yun, the Lawrence Yun Watch blog writes that:

Now he wants to get housing demand flowing again (while stimulating Realtor commissions of course) not by the traditional means of lowering prices, but by bribing buyers with a tax credit.Here's a suggestion Lawrence - IT'S CALLED LOWER THE DAMN PRICES.

This blogger is onto something. One proposal making its way through Congress would offer a tax credit to anyone buying a newly constructed home or foreclosure -- at a cost of $14.5 billion to the rest of us taxpayers.

The fact is that banks lent too aggressively, and builders built too aggressively. The last thing we need are more gimmicks designed to prop up the housing market -- especially at the cost of billions in badly-needed tax revenue.

Let the darn prices fall -- Home buyers will get the same savings that way in the form of lower prices -- and it will come at the expense of stupid lenders and stupid builders, not innocent taxpayers. We need to avoid shifting the burden of bad decisions from the bad decision makers to the people.

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